Question of the Day

Whose side of the story do you believe?

Baltimore Gas and Electric Co.'s customers are not paying any less for their electricity despite the start of Maryland's new deregulation of the industry.

On June 30, the Maryland Court of Appeals, the state's highest court, prohibited the start of electricity deregulation in BGE's service area.

The fight to stop BGE's restructuring plan started with New Jersey-based Mid-Atlantic Power Supply Association (MAPSA), which represents retail electricity suppliers, wholesale marketers and generation companies in the mid-Atlantic region.

The trade group has been challenging the terms of a settlement approved in November by the Maryland Public Service Commission, which gave the go-ahead for BGE's six-year, 6.5 percent rate reduction-restructuring plan effective July 1.

MAPSA claims that BGE's rate reduction is too low for any other suppliers or marketers to compete with.

"It doesn't create a real competitive market," said Suzanne Daycock, executive director of the association. "Customers are being deprived of savings and innovations that come along with a competitive market."

The June 30 court order called for a hearing on July 20, during which both sides can plead their case. BGE already has filed a motion for the court to reconsider the stay that kept deregulation from happening for BGE customers on July 1. The utility has requested a hearing to take place this week.

"MAPSA's last-minute ploy is an attempt to derail a plan that ushers in competition for all BGE's customers," said Robert S. Fleishman, vice president of corporate affairs and general counsel of BGE's parent company Constellation Energy Group, in a statement.

Yesterday, the Public Service Commission and the Maryland's Office of the People's Counsel, the state's consumer advocate group, filed a joint response in support of BGE. Court documents said the effect of stopping BGE's restructuring plan will be to "plunge Maryland's electric industry into a state of disarray."

Currently, there are no electricity suppliers in the Maryland market that have made any offers.

BGE, which has 1.1 million residential customers in Central Maryland, was intending to give the 6.5 percent rate reduction beginning July 1, when the rest of Maryland's investor-owned utilities dropped their rates and deregulation went into effect.

BGE residential customers with electric heating would pay an average of 4.06 cents per kilowatt hour, which is used to measure electricity consumption. The price would eventually increase to 5.2 cents per kilowatt hour by 2006.

Ms. Daycock said the price for residential customers is "close to a penny too low." As a result, the association's members can not effectively compete in the BGE's service areas.

The association, however, does not have any problem with the rates set by the three other investor-owned utility companies that service Maryland's residential customers. Potomac Electric Power Co., which has 435,000 residential customers in Maryland, has dropped its rate by 7 percent to about 5.01 cents per kilowatt hour.

Ms. Daycock said that the association has tried since August 1998 to work with BGE to reach a settlement.

"From MAPSA's standpoint, we have worked exhaustively to attempt to resolve this issue and have not been successful in getting cooperation in that regard," she said.

As the issue continues to be fought in court, BGE customers are continuing to pay the same rate they did June 30.

Bill Harris, a spokesman for the Public Service Commission, said the outcome for BGE customers is "ultimately in the court's hands."